SEK could see some support in the next months – Danske Bank Allan von Mehren, Chief Analyst at Danske Bank, noted the Swedish Krona could regain some pace in the next months.
Key Quotes
“In the Scandies, the SEK has seen support from not least the Riksbank’s Skingsley’s comment that the Riksbank can be more flexible (vis a vis ECB) now that inflation and ditto expectations are close to 2%”.
“Needless to say, the Riksbank’s ECB dependence is key for EUR/SEK given that the cross has been treating the RB as an ECB derivative for quite some time. If more members express this view it could lend some support to the SEK”.
“One guess is that Ohlsson and Flodén reason in a similar way. However, the other three members lead by Ingves – the majority – may not want to send any such signals”.Read More →

Banxico Preview: Hawks but no hikes – Rabobank Analysts at Rabobank fully expect Banxico to leave the policy rate unchanged at 7% today which will mark the third consecutive ‘no-change’ decision.
Key Quotes
“When we last wrote a preview the market was pricing in a decent chance of a rate cut by year-end and now the front-end of the OIS curve is pricing in a small chance of a rate hike.”
“This shift is unsurprising given the markedly more hawkish tone evident from the Minutes.”
“That said, our base case is for Banxico to remain on hold until it begins easing in 2018 H2.”
“This will be the last Banxico decision headed by Governor Carstens.”
“In our previous Banxico Preview we outlined our view that demand for carry would continue to provide support for MXN until NAFTA tensions rise.”
“The fourth round of NAFTA negotiations was by far the most difficult yet. There are clear obstacles that need to be navigated during the extended fifth round of negotiations scheduled for 15-21st Nov..Read More →

China: PPI inflation may have peaked – ING According to Iris Pang, Economist at ING, deleveraging in the corporate sector keeps China’s PPI inflation elevated, though they think it has peaked and a high base effect will start to push in lower from November.
Key Quotes
“Contrary to our forecast of a sharp acceleration, PPI inflation in October was unchanged from September’s 6.9% rate (INGF: 7.3% YoY, consensus: 6.6%). However, consistent with our forecast, high raw material prices associated with deleveraging reforms in key sectors (coal, steel) continued the main driver of PPI inflation. We believe PPI is close to its cycle peak and we expect the high base effect to start to move the YoY inflation rate lower from November.”
“CPI inflation accelerated more than consensus to 1.9% in October from 1.6% in September (INGF: 1.5%, consensus: 1.8%). Food drives CPI and the adverse weather conditions resulting in higher vegetable prices narrowed deflation in the food component (-0.4% vs. -1…Read More →